Water district loses court fight against companies

The Orange County Water District has lost more legal battles against companies accused of polluting the county's groundwater.

In separate rulings over the past few weeks, two Orange County Superior Court judges issued decisions that blasted the district's legal strategy.

Looking to clean up large plumes of toxic cleaning solvents and other chemicals, the district has sued companies with industrial operations dating to the 1950s. It seeks to cover future costs of cleaning up the plumes, estimated at more than $300 million. If it doesn't win, the district could pass on the cost to ratepayers, officials say.

Judges have sided with the companies over the past few years, and with these latest developments, the district board of directors faces a decision: appeal, and risk paying more of the companies' legal fees; or cut the losses now.

“It's giving our board pause,” said district chief hydrogeologist Roy Herndon. “They have not closed off any option at this point.”

Judge Kim Dunning found “no immediate threat to the groundwater” was demonstrated by the district, in her Oct. 29 decision covering the Fullerton and Anaheim area. She had previously issued a tentative ruling in the companies' favor.

Dunning also determined the district had only investigated the contamination – and not actually cleaned it up – so officials can't demand reimbursement.

Her 72-page decision applied to five defendants who went to trial; some others have settled or had their cases dismissed.

“The business community is looking to see if OCWD is going to do the right thing … and not use shakedown tactics,” said Lucy Dunn, president of the Orange County Business Council.

The contaminants at issue are in the shallow aquifer and will eventually seep into the deeper aquifer, where drinking water is stored, Herndon said. Cleaning it before the drinking wells become tainted has complicated the question of liability, he said.

“I think we're testing the laws, in our case, for the first time,” Herndon said.

The district manages the groundwater basin under north and central Orange County. Cities and local water districts pull from its wells, serving more than 2.4 million people with more than half of their water.

The lawsuits, which began in 2004, targeted about 40 defendants for releasing solvents like perchloroethylene, a suspected carcinogen.

The district sued companies large and small – from Northrop Grumman Corp., the fifth-largest U.S. government contractor, to Gallade Chemical, an 80-person rare- and fine-chemicals distributor.

The lawsuits are divided into two major groups – one covering south Santa Ana, the other in Anaheim and Fullerton.

Some companies are already working with other regulators to clean up and close contaminated sites, including Northrop Grumman and Gallade, based in Santa Ana.

“There have been millions of dollars spent on litigation,” CEO Richard Gallade said, “and it should have been spent on remediation.”

The district says the chemicals have gathered into a plume, so simply cleaning up specific sites – as other regulatory bodies might require – doesn't solve the problem.

In the Santa Ana cases, Judge Nancy Wieben Stock also ruled the district could not recover cleanup costs before it began cleaning up. Her Oct. 31 decision applied to 12 defendants; the 17 others in that area previously prevailed against the district.